Assuming that the user name appears correctly in the Global Address List and Offline Address Book, you may need to reset the Outlook Nickname cache, as described here:
How to reset the nickname and the automatic completion caches in Outlook
http://support.microsoft.com/kb/287623
Microsoft Outlook maintains a nickname list that is used by both the automatic name checking feature and the automatic completion feature. The nickname list is generated automatically as you use Outlook. If the nickname cache is corrupted, Outlook may be unable to identify recipients, may offer incorrect recipients when automatically completing the email address, or may send the message to the wrong person.
Unlike earlier versions of Outlook that store the nickname cache in a file on your computer, Outlook 2010 stores the nickname cache in your primary message store. For example, if you are using a Microsoft Exchange Server account, your nickname cache is stored in a hidden message in your mailbox.
Outlook 2010
- Open a new email message.
- Type the first few characters of the nickname cache entry that you want to remove from the cache.
- When the entry appears in the list of suggested names, move your mouse pointer over the name until it becomes highlighted, but do not click the name.
- When the “X” icon appears next to the highlighted name, click X to remove the name from the list.
Outlook 2007 or Outlook 2003
- Open a new email message
- Type the first few characters of the nickname cache entry that you want to remove from the cache.
- When the entry appears in the list of suggested names, use the UP and DOWN arrow keys on your keyboard to select the entry, and then press DELETE on your keyboard.